Principles for the Conduct of Company Operations Within the Minerals Industry

PRINCIPLES FOR THE CONDUCT OF COMPANY OPERATIONS WITHIN THE MINERALS INDUSTRY

PREPARED BY AUSTRALIAN NON-GOVERNMENT ORGANISATIONS

OCTOBER 1998

We welcome feedback All correspondence to: Australian Asia-Pacific Mining Network C/- Mineral Policy Institute P.O.Box 21, Bondi Junction, NSW, 2022, Australia Ph: 61 (0)2 93875540 Fax: 61 (0)2 93861497 Email: [email protected] Principles for the Conduct of Company Operations within the Minerals Industry

TABLE OF CONTENTS

1. BACKGROUND 7

2. GENERAL/OVER-RIDING PRINCIPLES 8

2.1 EXTRATERRITORIALITY 8 2.2 PUBLIC DISCLOSURE/COMMUNITY RIGHT TO KNOW 8 2.3 COMMUNITY PARTICIPATION 8 2.4 CONFIDENTIALITY CLAUSES AND ISSUES 8 2.5 COMPANY INVOLVEMENT IN LEGISLATIVE AND POLITICAL ISSUES 9 2.6 STANDARDS FOR LENDING, INSURANCE AND INVESTMENT 9 2.7 FUNDING FOR COMMUNITY PARTICIPATION (TRUSTS ETC) 9 2.8 INTERNATIONAL TREATIES AND CODES, INCLUDING COMPLIANCE 9 2.9 COMMUNITY (LOCAL) EMPLOYMENT 9 2.10 EDUCATION AND TRAINING (EG CULTURAL AWARENESS) 10 2.10 CONDUCT OF AGMS 10

3. LAND RIGHTS, LAND OWNERSHIP AND INDIGENOUS ISSUES 11

3.1 RESETTLEMENT 11 3.2 ROYALTY AND COMPENSATION AGREEMENTS 11 3.3 TRADITIONAL LAND RIGHTS 12 3.4 PROTOCOLS FOR NEGOTIATIONS 12 3.5 RIGHT TO NEGOTIATE AND VETO 13 3.6 NEGOTIATIONS WITH AND PARTICIPATION OF OTHER LAND OWNERS 13 3.7 DISJUNCTIVE VERSUS. CONJUNCTIVE AGREEMENTS 13 3.8 SMALL SCALE MINING 13 3.8.1 REGULATION AND LICENSING 14 3.8.2 SAFETY STANDARDS 14 3.8.3 ENVIRONMENT 14 3.8.4 COMPANY OBLIGATIONS 14

4. ENVIRONMENTAL STANDARDS 15

4.1 BASELINE DATA ESTABLISHMENT 15 4.2 WASTE MANAGEMENT, TREATMENT AND DISPOSAL 16 4.3 AREAS CLOSED TO EXPLORATION AND MINING 16 4.4 PRECAUTIONARY PRINCIPLE 17 4.5 INTERGENERATIONAL EQUITY 17 4.6 SUSTAINABLE DEVELOPMENT 17 4.7 ACID MINE DRAINAGE 18 4.8 URANIUM AND NUCLEAR FUEL CYCLE 18 4.9 DEFINITIONS OF ENVIRONMENTAL BEST PRACTICE 18 4.10 REHABILITATION AND REHABILITATION BONDS 19 4.11 SOCIAL VALUE OF MINERALS 19 4.12 TRANSPORT AND TRADE 20 4.13 POLLUTER PAYS 20 4.14 CONTINUOUS ENVIRONMENTAL IMPROVEMENT 20 4.15 HAZARDS AND CONTINGENCY PLANNING 20 4.16 ENVIRONMENTAL COST ACCOUNTING 20 4.17 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT 20

Prepared by Australian Asia-Pacific Mining Network 2 Principles for the Conduct of Company Operations within the Minerals Industry

5. HUMAN RIGHTS ISSUES INCLUDING CIVIL, POLITICAL AND SOCIAL RIGHTS

5.1 PREAMBLE 21 5.2 "THE MUST" OBLIGATIONS OF COMPANIES 22 5.3 PRACTICES COMPANIES "MUST AND SHOULD" FOLLOW 23 5.4 ECONOMIC CONSIDERATIONS FOR HUMAN RIGHTS PROMOTION AND PROTECTION 25 5.5 HOW 27 5.6 INTERNATIONAL HUMANITARIAN LAW - WITH RESPECT TO ARMED CONFLICT 31

6. LABOUR STANDARDS AND WORKERS' RIGHTS 32

6.1 INTRODUCTION 32 6.2 THE MUST - OBLIGATIONS OF COMPANIES 33 6.3 THE RIGHT AND FREEDOM TO WORK PRINCIPLE 33 6.4 EQUAL PAY FOR EQUAL WORK 33 6.5 JUST REWARD 33 6.6 RIGHT TO HOLIDAYS AND LEISURE 33 6.7 STANDARD OF LIVING/INCOME 33 6.8 NO SLAVE OR FORCED LABOUR 33 6.9 NON DISCRIMINATION 34 6.10 VOCATIONAL TRAINING 34 6.11 CONDITIONS OF EMPLOYMENT 34 6.12 TRADE UNION RIGHTS 34 6.13 THE ELIMINATION OF DISCRIMINATION AGAINST WOMEN 35 6.14 DISCRIMINATION ON THE BASIS OF MARRIAGE OR MATERNITY 35 6.15 CHILDREN AND WORK 36

7. INDEPENDENT MONITORING, AUDITING AND REPORTING 37

7.1 CODES OF CONDUCT INCLUDING ENFORCEMENT 37 7.2 INDEPENDENT MONITORING 37 7.3 PROMOTING COMPLIANCE 37 7.4 INDEPENDENT AUDITING 37 7.5 DESIGN AND IMPLEMENTATION OF MONITORING AND AUDITING 38 7.6 INDEPENDENT VERIFICATION AND REPORTING 38 7.7 COMPLAINTS MECHANISM 38

8. BIBLIOGRAPHY 40

Prepared by Australian Asia-Pacific Mining Network 3 Principles for the Conduct of Company Operations within the Minerals Industry ABOUT THIS PAPER

Support and endorsement of the contents The Australian Asian-Pacific Mining Network is made up of representatives of a number of organisations who support the content and general intent of this paper. It is important to note however that because the specific mandate of some organisations are limited (eg some groups deal only with human rights issues and others only with environmental issues) this means that they cannot specifically endorse those parts of the paper that fall outside their mandate.

Not final or definitive By definition a principles paper such as this cannot be final or definitive. It is a basis for ongoing discussion. We welcome suggestions for improvements or changes and note that, in the light of such comments and experiences there will in future be changes to our understanding of what we consider world’s best practice. Therefore in time the document will require updating. Companies using this document should not presume that some groups would not require stronger principles either now or in the future.

Not a code of conduct This paper is not a code of conduct and is not to be adopted or used as such. It is designed to provide a set of principles from which groups and organisations may draw guidance and which they may use as a basis for developing agreements on mining issues.

Enforcement of Codes of Conduct The writers of this document believe that ideally codes of conduct should be legally binding and enforceable via legislation in Australia. Codes which are not legislated may constitute a useful interim step towards self-regulation and the setting of standards. Where legislative implementation or international treaties are not a viable option for enforcement, codes should include types of sanctions which are designed to provide a deterrent to mining companies which are signatories to such codes. This could include sanctions such as removal of tax concessions or access to Government loans and/or insurance.

Restrictions on use The authors are not intending that there should be any restrictions on the use of material from this document or parts of this document but require that the source of the material be acknowledged, as well as the context from which the material is taken in the document, so as to prevent misrepresentation.

Paper represents the views of Network only This paper represents the collective views of representatives of the Australian Asia-Pacific Mining Network only. It does not represent the views of: any particular NGOs, partner groups of the organisations, or any other Australian or international NGOs. The writers welcome the support of other groups who may wish to promote the document for discussion.

Acknowledgments This paper has been written and edited by the Australian Asian-Pacific Mining Network. It was written and edited by Gideon Boas, Jeff Atkinson, Robert Stringer, Kate Gilmore, Malcolm Reid, Geoff Evans and Chris Harris after consultation with:

Australian Conservation Foundation Australian Council for Overseas Aid Australian Red Cross Amnesty International Community Aid Abroad Mineral Policy Institute World Wide Fund for Nature Uniting Church – Social Responsibility & Justice Construction, Forestry, Mining and Energy Union (Mining Division)

Prepared by Australian Asia-Pacific Mining Network 4 Principles for the Conduct of Company Operations within the Minerals Industry ACRONYMS ACF: Australian Conservation Foundation AGM: Annual General Meeting CEAFDAW: Convention on the Elimination of All Forms of Discrimination Against CEO: Chief Executive Officer CERD: Convention on the Elimination of all forms of Racial Discrimination CROC: Convention on the Rights of the Child EIA: Environmental Impact Assessment ESD: Ecologically Sustainable Development: GATT: The General Agreement on Tariffs and Trade ICCPR: International Covenant on Civil and Political Rights ICESCR: International Covenant on Economic, Social and Cultural Rights IHL: International Humanitarian Law ILO: The International Labour Organisation IMF: The International Monetary Fund NGO: Non Government Organisation NT: Northern Territory OECD: Organisation for Economic Co-operation and Development SIA: Social Impact Assessment TNC: Trans National Corporations UDHR: Universal Declaration of Human Rights UNDRIP: United Nations Draft Declaration on the Rights of Indigenous People US: United States of America

DEFINITIONS Landowners: The term landowners is used in this document to include both legally recognised landowners under the prevailing land tenure and traditional owners of land regardless of whether their land rights are recognised under prevailing land tenure. Disjunctive process: A process whereby the company and landowners make separate agreements to cover the exploration phase and the mining phase. Conjunctive process: A process whereby the company and landowners make an agreement that covers both the exploration and mining phases. That is landowners agree to mining if a workable deposit is found as a result of the exploration. Independent: Not selected by or connected with a company or any body having a vested (financial or ownership) interest in the company or the minerals industry. Participation: As equal partners in any process, with full access to all necessary information and a share in the decision making process, including the right to publish dissenting reports. Affected people: Any person, persons or community affected either financially, socially or environmentally by a project. Community: A term defining all those parties with an interest in a project or an area or issue affected by a project. The nature and extent of community will vary from place to place and time to time. Involuntary resettlement: Is resettlement that is agreed to by the community, as a result of their agreement to a project proceeding on their land(s). Not to be confused with forced resettlement to which people have not consented. International best practice: The standards by which a project should be operated, as defined jointly by the company, independent experts and the community. Hopefully this will keep changing and improving. Prepared by Australian Asia-Pacific Mining Network 5 Principles for the Conduct of Company Operations within the Minerals Industry Tailing(s): Waste materials generated at the end of milling and separation of metal from ore. Ore: material containing both the metal to be extracted and waste materials. Stake Holders: Those individuals, community groups or other organisations whose interests are affected by a company’s actions.

Among the most important of these stakeholders are:  residents of local communities in which companies have production facilities or offices,  competitors in the related small business fields,  business and trade associations.  state and national governments,  regional and international inter-governmental organisations,  local, regional and international not-for-profit, non-governmental organisations working for human rights, education, welfare, economic or cultural development, environmental protection, and various other humane objectives,  employees and contractors who work for the company. Non Government Organisation: Refers to organisations or special interest groups that represent grass roots people’s movements and concerns as opposed to government or business interests. Ecologically Sustainable Development: There is no clear and unambiguous definition of ESD. At best it is regarded as a process of change designed to effectively integrate ecological, social and economic considerations such that the needs of future generations are protected in the process of meeting the needs of the present generations. It is based upon a series of principles regarding such matters as resource use, global equity, intergenerational equity and the nature of development (ACF 1993). Environmental Impact Assessment: The identification, assessment and evaluation of the potential environmental effects associated with any particular policy, program, project or development proposal. (Environmental Impact Assessment Review Committee, 1986). To this definition it is important to add processes of monitoring and follow up. Socio-economic Impact Assessment: The identification, assessment and evaluation of the natural, or biophysical, environmental impacts to include the social and socio- economic impacts that may be associated with any particular policy, program, project or development proposal. (Carley,1980) Code of Conduct: A statement of universal principles and ethical guidelines for the way that a company will regulate a whole range of relationships between the company and the stakeholders who are affected by its activities. Other organisations such as NGOs need similar codes. Terms used: “the must” The legal obligations, prescriptions and proscriptions under which mining companies operate. “the should” The moral obligations under which mining companies operate.

Prepared by Australian Asia-Pacific Mining Network 6 Principles for the Conduct of Company Operations within the Minerals Industry PRINCIPLES FOR THE CONDUCT OF COMPANY OPERATIONS WITHIN THE MINERALS INDUSTRY

1. BACKGROUND

The following position paper has been prepared by Australian based NGOs, with a view to providing a basic set of principles which should be followed by minerals companies regardless of where they are operating or under what circumstances. It is intended to have a general application for the operations of mining and oil and gas companies.

In addition we hope that the paper will provide a useful resource document for governments, communities and non-government organisations which are dealing with minerals companies, environmental and human rights issues.

It is important to stress that this paper is primarily directed at providing a broad set of principles. It cannot and does not attempt to set prescriptive standards for individual projects which minerals companies may undertake. Nevertheless there are aspects of these principles that provide definitive guidelines (as opposed to technical standards) which companies should follow, such as the guidelines applying to the management of tailings, waste rock and acid mine drainage.

Prepared by Australian Asia-Pacific Mining Network 7 Principles for the Conduct of Company Operations within the Minerals Industry 2. GENERAL/OVER-RIDING PRINCIPLES

2.1 Extraterritoriality

PRINCIPLES: Companies should be bound by the jurisdiction of the territory in which they have their headquarters, regardless of where they are operating (The principle of extraterritoriality).

Australian companies operating overseas should adhere, at all stages of operations to the highest standards of environmental protection and management that are required and practised in Australia.

Companies should comply with local and international standards where these are higher than in Australia.

2.2 Public disclosure/community right to know

PRINCIPLE: Companies should fully disclose all commissioned reports by governments, companies and other stakeholders relating to environmental, social, human, political, civil and social rights and health and safety issues.

2.3 Community participation

The Rio Declaration (Principle 10) states “Environmental issues are best handled with the participation of all concerned citizens”

PRINCIPLES: Companies should include community participation at all stages of project identification, development and monitoring.

Companies should include NGOs/communities and/or their nominated representatives, in the community’s right to know and participation in the development of environmental impact statements and social impact statements.  All potentially affected communities should be identified and involved  NGOs identified by landowners/holders should be involved  Appropriate gender sensitive mechanisms should be established for community participation  Communities need to understand all aspects of exploration and mining, thus involving translation and discussion in a culturally appropriate manner.  Liaison and negotiation should be conducted with groups nominated according to traditional custom  Independent arbitration should be provided to resolve conflicts.

2.4 Confidentiality clauses and issues

PRINCIPLE: Companies should avoid binding parties to extensive confidentiality clauses.

Prepared by Australian Asia-Pacific Mining Network 8 Principles for the Conduct of Company Operations within the Minerals Industry In general companies should be required to specifically nominate which documents and/or meetings it wishes to keep confidential and should be required to explain why. In all other cases documents and meetings are assumed to be public. 2.5 Company involvement in legislative and political issues

PRINCIPLE: Companies should not becoming involved in the drafting of legislation for governments in which they have a vested interest.

This does not exclude companies from openly and publicly advocating particular courses of action for Governments but such involvement should be transparent.

2.6 Standards for lending, insurance and investment

PRINCIPLE: Companies involved in the mining industry, including banks, insurance companies, investment funds, superannuation funds should establish ethical guidelines which preclude investing, insuring or lending to companies which are not prepared to abide by acceptable codes of conduct. Such codes should be in line with community standards and endorsed by community groups.

2.7 Funding for community participation (trusts etc)

PRINCIPLE: Companies should establish trust accounts in order to ensure resources to enable adequate levels of community and NGO participation when requesting such organisation to help them in their work. Such trusts should be administered independently of either company or NGOs by a Board of trustees, which should include representatives of companies, and of community groups but which has a majority of independent representatives.

If mining companies want to use expertise of NGOs and Community groups then they should be willing to pay for it. This is to facilitate NGOs in fulfilling roles that companies may request. This is to be completely separate from any money for compensation of communities or victims. It is then up to NGOs as to whether they should accept such money.

2.8 International treaties and codes, including compliance

PRINCIPLE: Companies should abide by all relevant international treaties and codes such as mentioned in this document..

An internationally binding code of conduct should be developed for Trans National Corporations.

2.9 Community (local) employment

PRINCIPLE: Companies should implement programs for the employment of the local people.

This means working with landowners, unions and relevant community organisations for the employment of local people such as landowners, indigenous groups, affected people, nationals and others depending on the desires expressed by stakeholders. Prepared by Australian Asia-Pacific Mining Network 9 Principles for the Conduct of Company Operations within the Minerals Industry Targets should be agreed to and regularly reviewed with reasons for any shortfalls on the targets identified. Where appropriate compensation clauses or penalties should be provided where companies fail to meet targets.  Plans should include the development of local businesses  Targets should include women  Training and employment targets should be subject to annual audit 2.10 Education and training (eg cultural awareness)

PRINCIPAL: All employees involved (including CEOs etc.) in decision-making should be required to undertake appropriate training/cultural awareness and environmental workshops. Employees should be bound by codes of conduct as a condition of employment with appropriate penalties for breaches.  These codes need to cover the activities of contractors and suppliers.  Small-scale miners associated with the company should also be included  Meeting environmental standards should be an important part of job descriptions and evaluation  Cultural awareness workshops should be run in ways that engenders respect for local communities, their culture and customs, and where possible involve local communities.

2.10 Conduct of AGMs

PRINCIPLE: Companies should accept AGMs as suitable forums for discussions and questioning on key matters of public interest and should extend a broad invitation to affected communities and community groups to send representatives.

A defined process for asking questions over a reasonable period of the meeting should be accepted by companies. Transcripts and/or full and accurate minutes should provided to interested parties on request. In return such stakeholders and their representatives should follow mutually agreed rules.

Prepared by Australian Asia-Pacific Mining Network 10 Principles for the Conduct of Company Operations within the Minerals Industry 3. LAND RIGHTS, LAND OWNERSHIP AND INDIGENOUS ISSUES

3.1 Resettlement

PRINCIPLES: Companies should not forcibly remove or be a party to others who want to remove indigenous people from their land or territories. No relocation shall take place without free and informed consent of the indigenous peoples concerned and after agreement on just and fair compensation. (Article 10, UN Draft Declaration on the Rights of Indigenous Peoples, UNDRIP)

Companies should not operate any project in areas where any forced removals from land have occurred.

Companies should ensure that if the development of a mine means that people have to be moved off the mining site, then the resettlement and rehabilitation of those people, should be agreed to by the people of the affected community. Such removals should be carefully planned and implemented by the mining company, so that no affected person, group or community has their standard of living, economic, culture and social cohesion diminished as a result.

This applies equally to communities that have agreed to move (“involuntary resettlement) and to host communities at the resettlement sites.

The World Bank’s policy, contained in its Operational Directive 4.30 “Involuntary Resettlement”, states:  Community participation in planning and implementing resettlement should be encouraged and facilitated. Full account should be taken of alternative plans proposed by the affected people and they must be allowed to identify and determine suitable resettlement sites themselves.  All involuntary resettlement should be conceived and executed as development programs, with settlers provided sufficient investment resources and opportunities to share in project benefits. For example, people must be allowed sufficient lead-time to rebuild lost or damaged agricultural or other forms of livelihood at the resettlement site before being forced to move.  Where those being displaced have agriculture as their primary source of income and livelihood, every effort must be made to replace land with land. If suitable land is not available, non-land based strategies built around opportunities for employment or self-employment should be used.  Relocated people must receive legal land titles for their resettlement plots, be they house plots or agricultural land.

3.2 Royalty and compensation agreements

PRINCIPLE: Companies should ensure that all royalties and compensation agreements are based on international best practice in terms of terms and conditions being the highest achievable by landowners for equity, participation, employment, royalties and compensation.  Companies would need to clearly define how they had designed and calculated their offers based on formulas derived from other mining agreements elsewhere.

 Compensation should be determined via a process of negotiation and consultation, using community involvement mechanisms and other means.  Displaced persons who do not receive land should be compensated for their loses at replacement values that include full net present value and a stream of benefits into the future, and prior to the actual removal or loss. The compensation should enable them to purchase the equivalent amount of land or other income generating resources before being forced to move and suffering loss of any kind.  Common property resources including water, energy, fodder or grazing, should also be compensated for, as should religious and cultural sites. Likewise water resources which are polluted by mining activity should be compensated for.  An appeals mechanism should be put in place locally so that those who feel they have not been fairly compensated for assets lost can obtain a fair and impartial hearing. This should be primarily a process involving the claimant and the company without the involvement of government officials.  These are in addition to the royalty payments due to the states where the returns from mining are used for the benefit of the total population.

3.3 Traditional land rights

PRINCIPLE: Companies must recognise indigenous people and their traditional or customary ownership of land especially where a host government does not recognise the legal status of customary land.

Customary ownership of assets including land should be given the same status as legal ownership and compensated for in the same way. The absence of legal title to land by indigenous groups should not be a bar to compensation.  At the earliest possible stage in a mining project, a survey should be conducted in collaboration with local communities of which individuals, groups or communities have rights to what land or other assets in the project area. Where there is uncertainty or conflicting claims within to land this should be noted and taken into account when negotiating compensation.  Where land is communally owned, companies must negotiate with the community as a whole and not just sympathetic leaders, even though this may involve difficulties and delays.  Individuals, groups or communities who have user rights under customary law, that is, the right to use the land for certain purposes or to collect certain goods from it, without actually owning it, should also be compensated if these rights are taken away.

3.4 Protocols for negotiations

PRINCIPLE: Mining companies should develop and publish a code of practice for negotiations over exploration and mining with communities and NGOs.

This would include mechanisms for:  identifying landowners,  employment of appropriate independent consultants,  procedures for contacting and meeting with landowners,  the provision of independent technical, environmental and social advice to landowners and/or their advisers, Prepared by Australian Asia-Pacific Mining Network 12 Principles for the Conduct of Company Operations within the Minerals Industry

 the involvement of NGOs (if desired by landowners),  protocols governing the point at which companies accept that negotiations should cease (after a refusal for example),  protocols for dealing with differences between landowners about explorations and mining,  financial assistance to landowners,  and many similar issues.

Mining company staff involved in consultations with indigenous groups should have appropriate training in cross-cultural communication issues.

3.5 Right to negotiate and veto

PRINCIPLE: Companies must recognise that every community has a right to negotiate over the use of its land and impose a veto on development that it does not support.

This right is implicitly recognised under Article 17 of the UDHR (protection against arbitrary interference with property). In addition the Human Rights Committee has interpreted Article 27 to include the protection of “a particular way of life associated with the use of land resources”

This rights is also recognise under the International covenant on Civil and Political Rights (Article 1), as part of the right to self-determination.

3.6 Negotiations with and participation of other land owners

PRINCIPLE: Companies must ensure that all landowners are fully involved in any negotiations concerning any minerals operations which affects or has the potential to affect them.

The rights of such landowners should be recognised as being similar to those of affected people under the (Australian) Aboriginal Land Rights (NT) Act. Under this legislation no mineral exploration or mining can take place on Aboriginal land or on registered sacred sites unless the owners or custodians have been fully consulted and have agreed to such activity. The Aboriginal Land Councils are required by law to fully involve landowners and to ensure that they have consented to any exploration or mining on their lands.

3.7 Disjunctive versus. conjunctive agreements

PRINCIPLE: All agreements with indigenous people or other landowners should be based on the disjunctive agreement process whereby a separate agreement is required at both mining and exploration stages.

Conjunctive processes are not acceptable because land owners are being asked to agree to a mining proposal prior to being provided with the full information on the size, nature and full impact of the mine.

3.8 Small scale mining

The small-scale mining industry is a legitimate and valuable part of the minerals industry in many non-industrialised countries and a traditional provider of employment and subsistence. Its role, however, is often poorly understood, its value is under-recognised, especially when it relies for its economic competitiveness on low wages and zero environmental and occupational health and safety regulations. Statistics on such a mining industry are often not collected and definitions of the industry are usually imprecise. Because of this the industry is often technically illegal.

Often when large foreign or domestic companies seek to develop a minerals project where there is existing small-scale mining, the local miners are either forced from their land or marginalised in other ways.

3.8.1 Regulation and licensing COMMENT: Governments should seek to regulate and licence small-scale mining operations. This not only provides recognition and legitimacy but can provide a significant improvement in safety and proper working conditions if carried out effectively.

3.8.2 Safety standards COMMENT: Governments need to properly inspect and monitor small-scale mining operations to ensure acceptable working and processing conditions. Such inspection and monitoring should follow the introduction of appropriate regulation and taxation regimes.

3.8.3 Environment COMMENT: Small-scale mining has the ability to cause major environmental damage particularly in situations where potentially damaging pollutants such as arsenic and mercury are widely used. The Government should regulate and inspect small-scale mining, using the proceeds of taxes collected to ensure environmental protection.

3.8.4 Company obligations PRINCIPLE: Companies should recognise the legitimate role and rights of small-scale miners and not seek to obtain minerals leases that involve their dispossession. Where appropriate companies should negotiate agreements with small-scale miners for compensation, where such miners are prepared to relinquish their land. Where the activities of large companies adversely affect small-scale miners appropriate compensation should be paid.

Prepared by Australian Asia-Pacific Mining Network 14 Principles for the Conduct of Company Operations within the Minerals Industry 4. ENVIRONMENTAL STANDARDS

Environmental standards should aim towards ever increasing international best practice. There are no international environmental agreements specifically governing how mining and other mineral industry projects should be managed. There are a variety of international agreements, which may be directly or indirectly relevant in a general sense, as well as various codes and standards promulgated by the World Bank and by the industry itself.

These include: 1. The 1972 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (the London Convention). 2. The 1990 Convention for the Protection of the South Pacific Region (the South Pacific Convention) and Protocol for the Prevention of Pollution of the South Pacific by Dumping (the South Pacific Protocol) 3. The Paris Convention for the Prevention of Marine Pollution from Land Based Sources, 1974 Montreal Rules for Trans-frontier Pollution (the Paris Convention on LBS) 4. The Convention on Wetlands of International Importance (the Ramsar Convention) 5. The World Heritage Convention 6. World Bank Guidelines for Mining 7. The Convention on EIA in a trans-boundary context 8. Helsinki Rules on the Uses of Waters of International Rivers 9. The International Council on Metals and the Environment Charter, 1993 10. The Berlin Guidelines: Mining and Environment Guidelines, 1991 11. The Business Charter Sustainable Development (International Chamber of Commerce), 1991 12. Agenda 21, United Nations Conference on Environment and Development, 1992 13. United Nations Revolving Fund for Natural Resources Exploration, 1973 14. UN Convention of the Law of the Sea, 15. The Rio Declaration on Environment and Development, 1992 16. The Stockholm Declaration, 1972

COMPANIES MUST ABIDE BY THE FOLLOWING PRINCIPLES BASED ON INTERNATIONAL TREATIES OR CONVENTIONS

4.1 Baseline data establishment

PRINCIPLE: Companies should establish baseline monitoring programs at a very early stage.

Current practice of commencing operations prior to proper collection of baseline data is not acceptable. In most cases collection of such data will need to commence at least a full year, if not longer prior to any substantial disturbance of either the social or environmental situation.  Guidelines should be developed for the collection of baseline data

 Exploration should be minimum impacts  Communities should be involved in agreements for exploration, data collection and rehabilitation from the earliest moment  Companies have an obligation to ensure that communities understand the exploration program and associated activities.

4.2 Waste management, treatment and disposal

PRINCIPLE: Companies must recognise and take action to prevent any type of ocean and/or riverine tailings disposal that is not acceptable. Companies should recognise that mineral deposits must not be developed unless tailings containment is available and acceptable, from safety and other perspectives.

In order to ensure that companies properly control wastes all mines should ideally be required to conform to a closed loop system. Where any waste, other than tailings, (eg sewage) are discharged water intakes for the mine should be located downstream of waste discharge points, so as to ensure that the company does not discharge wastes that are unacceptable for further use.

PRINCIPLE Companies must ensure that pollution of riverine, ground-water and marine environments does not occur from waste rock dumps.

The World Bank mining guidelines provide that “Marine discharges must not have an adverse affect on the environment”. The Lihir Mine run by Rio Tinto was refused political risk insurance by the US Federal Agency, the Overseas Private Investment Corporation on the grounds that the it could not fund projects which breached the London Convention on dumping of wastes and the South Pacific Protocol.

The Basel Convention provides that “..polluters causing trans-frontier pollution should be subject to legal or statutory provisions no less severe than those which would apply for any equivalent pollution occurring within their country” and that states should “(take) all practicable steps to ensure that hazardous or other wastes are managed in a manner which will protect human health and the environment against the adverse effects which may result from such wastes”

The Stockholm Declaration states that “The discharge of toxic substances or of other substances and the release of heat, in such quantities or concentrations as to exceed the capacity of the environment to render them harmless must be halted¼”

Principle 21 of the Stockholm Declaration states “States have¼the responsibility to ensure that activities¼..do not cause damage to the environment of other states or of areas beyond the limits of national jurisdiction”

Article 194 of the Law of the Sea requires that “States take¼.all measures consistent with this Convention¼.to prevent, reduce and control pollution of the marine environment from any source¼”

4.3 Areas closed to exploration and mining

PRINCIPLE:

Companies must ensure that they make a firm commitment to putting various areas off limits to both exploration and mining. These should include all world heritage listed areas, all national parks, conservation reserves, international sites (such as Ramsar sites) and most areas listed for indigenous cultural reasons. Where possible there should be buffer areas around such parks and reserves.

The World Heritage Convention and the Ramsar Convention require states to protect sites of World Heritage value and to protect Ramsar listed wetlands.

4.4 Precautionary principle

The Rio Declaration provides a relevant definition where it states that, “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost effective measures to prevent environmental degradation”

PRINCIPLE: All companies should operate according to the precautionary principle, which provides that in the event of doubt about the potential impacts of an action or operation, the company should avoid taking that course of action, in particular: ¨ Mining or exploration should only occur where a company can demonstrate that such activity will not jeopardise the long-term viability of a species, ecosystem or the health of landowners and employees ¨ A pro-active approach to minimising risk should be adopted.

4.5 Intergenerational Equity

The Rio Declaration states “The Right to development must be fulfilled so as to equitably meet the development and environmental needs of present and future generations”

PRINCIPLE: Companies should ensure that all mining operations adhere to the principle of intergenerational equity.

If necessary resource companies must undergo a major organisational and cultural shift in the way in which they operate, in order to move towards mineral efficiency practices, including vertical integration to accommodate re-use and recycling of minerals products.

COMPANIES SHOULD ADHERE TO THE FOLLOWING PRINCIPLES AT ALL TIMES EVEN WHERE THERE MAY BE NO RELEVANT INTERNATIONAL TREATY OR OBLIGATION.

4.6 Sustainable development

PRINCIPLE: Companies must publicly recognise that mining in its basic form of simple extraction of a non-renewable resource cannot be considered sustainable and should not be portrayed as such.

Prepared by Australian Asia-Pacific Mining Network 17 Principles for the Conduct of Company Operations within the Minerals Industry Companies wishing to move towards concepts of sustainability should provide public disclosure of steps towards achieving this including independently verified environmental reports with best practice targets.

PRINCIPLE: Companies that are vertically integrated companies, should produce reports showing how the company is achieving recycling of metal products. Non-vertically integrated companies (ie mining companies without manufacturing/retailing arms) should demonstrate agreements with other companies which set out goals for metals recycling targets of goods produced from company minerals.

PRINCIPLE: Companies should set goals for waste minimisation, recycling and life cycle targets for minerals/mineral products.

As discussed above, this means that where a company is not involved in manufacturing or retailing activities which would allow it so set such goals within the company, it should make agreements for such targets with companies which it supplies.

4.7 Acid Mine Drainage

PRINCIPLE Companies should not mine high sulphide ore-bodies unless steps are in place to prevent the effects of Acid Mine Drainage (AMD).

AMD is potentially the most serious, widespread and long-lasting of all environmental impacts.

The World Bank guidelines note that “On-land disposal systems should be designed to isolate acid leachate generating material from oxidation or percolating water”

4.8 Uranium and nuclear fuel cycle Uranium is a very poisonous mineral. All uranium that contributes to the nuclear fuel cycle or is used for military purposes ends up as radio-active waste. The problems of waste disposal have not been solved. There are serious health problems for workers who work in and communities who live near mines and nuclear installations. There is no safe level of radiation and radioactivity can not be contained. It leaves an unmistakable irreversible legacy causing mutagenic effects many of which are only just beginning to become evident. The end uses of uranium in unsafe nuclear reactors and for military purposes should also preclude uranium mining.

PRINCIPLE: Companies should not be involved in the mining, milling or processing of uranium.

The potentially damaging environmental effects of radioactive mine wastes, and the failure to find any acceptable way to isolate those wastes from the environment over the tens of thousands of years in which they remain dangerous precludes uranium mining.

Prepared by Australian Asia-Pacific Mining Network 18 Principles for the Conduct of Company Operations within the Minerals Industry Uranium mining breaches many of the most important environmental principles such as ecologically sustainable development, the precautionary principle and intergenerational equity.

4.9 Definitions of environmental best practice

PRINCIPLE: Companies should agree to best practice targets being defined not by companies, but by independent committees comprising scientists, other experts (eg social scientists) NGOs community representatives, and company representatives.

4.10 Rehabilitation and rehabilitation bonds

PRINCIPLE: Companies should be required to rehabilitate land as closely as possible to its pre-mining condition.

This should include as close an approximation of prior species diversity as feasibly possible and will entail extensive baseline studies. Rehabilitation bonds should be sufficient to cover all rehabilitation costs and should also include an amount for accident remediation.  Rehabilitation plans should be prepared in consultation with local communities.  Rehabilitation should be sufficiently rigorous to restore pre-mine habitats and to support the return of including native flora and fauna to pre-mining levels.  Rehabilitation should restore the natural function of streams existing prior to mining taking place, including flood energy dissipation, bank building, sediment filtering, water storage and aquifer recharge.  Bonds should cover the full costs of in rehabilitation and ongoing monitoring and remediation  Prior to establishing rehabilitation goals, local NGOs should be resourced to conduct awareness programs.  Post mine closure land use should be agreed on with communities prior to exploration and/or mining occurring.  Reclamation should occur in parallel with mining not at the end of mining.  Where mining has taken place on land that has been used or degraded by some other human activity (eg farming) it may actually be desirable to rehabilitate a mine to other than its previous use. For example for forestry or some other sustainable use.

4.11 Social value of minerals

PRINCIPLE: Companies should include in their assessment of investment options the social usefulness of minerals to be extracted.

For example, some consideration needs to be given to the social usefulness of minerals such as gold and diamonds. It is arguable that since these minerals are mainly used for decorative purposes (such as jewelry) or can be produced artificially, they have less social value than minerals with wider social and industrial applications

Prepared by Australian Asia-Pacific Mining Network 19 Principles for the Conduct of Company Operations within the Minerals Industry (eg iron, copper). Against this the cultural role of minerals such as gold in India, for example, needs to be taken into account.

In addition the social value should be evaluated against the environmental impacts of mining processes. Gold mining, for example, produces much larger volumes of waste than most other mineral extraction and also uses toxic materials such as cyanide and mercury.

Proposals to mine minerals which have major global impacts (eg global warming) such as coal and other hydrocarbons should be subject to a full assessment of available alternatives prior to any consent being given for a project to proceed. Simply assessing these minerals on the basis of local impact is not acceptable.

4.12 Transport and trade

PRINCIPLE: Companies should identify mechanisms by which all the environmental and social costs involved in transport and trade operations can be avoided or minimised.

The transport and trade in minerals involves high environmental and social costs. These include energy costs and oil spills.

4.13 Polluter pays

PRINCIPLE: Companies should ensure that all environmental costs involved in mining, milling, transport and processing of minerals should be borne by the company as polluter/generator and should include these costs as part of their feasibility assessment. These should include all external costs such as impacts on recreational values or tourism, costs of remediating accidents and other associated social costs. Advance compensation agreements should be negotiated, where appropriate. Full costs of rehabilitation and ongoing monitoring should be borne by the developer.

4.14 Continuous environmental improvement

PRINCIPLE: Companies should operate under the concept of continuous environmental improvement. This concept provides for continual annual review of environmental targets. Community groups should be involved in setting these targets at all levels. ¨ The process of review and target setting must be transparent and independent ¨ Performance targets should be quantifiable wherever possible

4.15 Hazards and contingency planning

PRINCIPLE: Companies should prepare a plan to deal with a range of potential accidents and environmental emergencies associated with mining. These should include off-site activities such as transport. ¨ Contingency plans should be prepared and tested

¨ Appropriate information on health and environmental hazards and relevant protective measures should be promptly reported to authorities, employees and the public.

4.16 Environmental cost accounting

PRINCIPLE: Companies should ensure that accounting practices identify all costs, such as environmental and social costs, associated with company operations and these are taken into account in actual pricing of resources and, where appropriate lodged in trust funds for post mine rehabilitation.

4.17 Environmental and social impact assessment

PRINCIPLE Companies should carry out environmental and social impact assessment for both exploration and mining activities. The company using independent consultants agreed to by both the company and the community, or the representative organisation of the community’s choice should pay for studies. All EIAs should include the option for mining not to proceed at all if environmental and social impacts are found to be sufficiently severe. 5. HUMAN RIGHTS ISSUES INCLUDING CIVIL, POLITICAL AND SOCIAL RIGHTS

5.1 Preamble

Mining companies, like businesses, corporations, and commercial enterprises of all kinds, whether they be privately or publicly owned, and whether they hold operations in a single country or across several nations, are obliged to protect, observe and promote internationally recognised human rights. The Universal Declaration of Human Rights (UDHR) proclaims human rights to be:

a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms, and by progressive measures, national and international, to secure their universal and effective recognition and observance (Preamble).

Mining companies, as organs of society, share in the responsibility to promote respect for these rights and freedoms and to secure their universal and effective recognition and observance. Whilst the UDHR was not signed with the intention of being a legally binding document, it has been absorbed into the framework of most of the major international human rights conventions and has quite probably become a binding international instrument by way of custom or general principles of law.

The fact that mining companies carry out their essentially economic missions does not excuse them from the responsibility to protect and to promote human rights under international law and moral norms.

Whilst it is recognised that business enterprises and commercial organisations do not have the same responsibilities in the field of human rights as do governments, business must carry forward legal and ethical responsibilities for human rights. This

Prepared by Australian Asia-Pacific Mining Network 21 Principles for the Conduct of Company Operations within the Minerals Industry is essential for the purposes of compliance by mining companies with international as well as the domestic laws and norms of the countries in which they operate. The very nature of mining operations as long term ventures make mining companies particularly susceptible to the social, political and economic context of their operations.

The response to human rights is divided into three sections: 1. The legal obligations, prescriptions and proscriptions under which mining companies operate – THE MUST 2. The moral obligations under which mining companies operate, and the operational advantages of such obligations – THE SHOULD 3. The machinery for structuring obligations (Codes of Conduct, Memoranda of Understanding etc) – THE HOW

5.2 “The Must” Obligations of companies

PRINCIPLE: Companies must observe not only the laws applicable in the countries in which they operate but also International Human Rights law, which includes requirements which must be met not only by states but by other entities, regardless of whether such laws have been ratified by the states within which companies operate.

Human Rights instruments include:

 Universal Declaration of Human Rights (UDHR)

This Declaration covers a wide range of rights from liberty and security of the person, due process, prohibitions on torture to rights protecting freedom of movement, asylum, expression, conscience and religion, assembly and equal pay. The Declaration, adopted by the UN General Assembly in 1948 without a dissenting vote, is the foundation of the major human rights treaties now in existence.

 International Covenant on Civil and Political Rights (ICCPR)

This document is the human rights treaty covering the fundamental rights of people to life, self-determination, freedom from torture and slavery, liberty and security of person, freedom of thought, conscience and religion, freedom of association and the right of minorities to enjoy their own culture.

Many of the allegations against multinational corporations violating or being complicit in the violation of human rights concern transgressions that are defined within the ICCPR.

 International Covenant on Economic, Social and Cultural Rights (ICESCR)

The rights included in this treaty range from the right to self-determination, the right to work, adequate standard of living and education, to the right to take part in cultural life and enjoy the benefits of scientific progress and its application

 Convention on the Elimination of all forms of Racial Discrimination (CERD)

This Convention prohibits racial discrimination and guarantees equality for all in the enjoyment of their human rights, and defines racial discrimination as:

“any distinction, exclusion, restriction or preference based on race, colour, descent or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life.”

 Convention against Torture and Other Cruel, Degrading Treatment or Punishment (Torture Convention)

This Convention proscribes acts of torture as defined, and requires measures to be taken to prevent torture, punish torture and provide a remedy for torture victims. A Special Rapporteur on Torture was appointed by the UN Commission on Human Rights in 1985 to examine questions relevant to torture and to seek and receive credible and reliable information and respond quickly to such information.

 Convention on the Rights of the Child (CROC)

This Convention provides for the rights of children to freedom of expression, thought, conscience and religion; the highest attainable standard of health; protection from all forms of physical and mental violence and economic exploitation

 OECD Declarations regarding International Investment and Multinational Enterprises and Tripartite Declaration of Principles of the ILO.

While the OECD provisions are purely voluntary the guidelines have had a significant impact upon world corporate practice through their enunciation of broad equitable principles and standards and through their reporting and monitoring system. As such the OECD guidelines are recognised as establishing just and fair norms of behaviour for both TNCs and host governments.

The ILO’s Tripartite declaration of principles concerning multinational enterprises and Social policy addresses employment, conditions of work and life and industrial relations and reflects the consensus of government, employer and labour in the ILO. See section 8 for further references.

 Convention on the Elimination of All Forms of Discrimination Against Women (CEAFDAW)

This convention was established in the conviction that the new international economic order based on equity and justice would contribute significantly towards the promotion of equality between men and women and thus Prepared by Australian Asia-Pacific Mining Network 23 Principles for the Conduct of Company Operations within the Minerals Industry overcome discrimination and conditions of poverty that restricted access to food, health, education, training and opportunities for employment.

5.3 Practices companies “must and should” follow

The following material concerns responsibilities which accrue to the activities of mining companies either by virtue of binding legal obligation or social and moral prescription:

Applied to the business setting, mining companies like all corporations are under certain responsibilities:

PRINCIPLE: Mining companies must have a responsibility to contribute to the promotion and protection of human rights.

In an increasingly globalised world economy, the decisions and actions of mining companies impact directly on governmental policies and on the enjoyment of human rights. The Universal Declaration of Human Rights (UDHR) calls on “every individual and every organ of society” to play its part in securing universal observance of human rights. Mining companies, like all business enterprises, are organs of society. As their operations come under scrutiny around the world, human rights promotion and protection is increasingly demanded by consumers, shareholders and the communities with whom they interact.

PRINCIPLE: Within their own sphere of co-operations all mining companies must have a direct responsibility to respect human rights in their own operations especially for the human rights of their primary stakeholders.

Their employees and other people with whom they work are entitled to rights such as freedom from discrimination, the right to life and security, freedom from slavery, freedom of association, including the right to form trade unions, and fair working conditions). Particular care needs to be taken by mining companies to ensure that their contracts and arrangements with corporate security guards, and relationships with state security and police forces do not lead to human rights abuses.

Definition: “Own sphere of operations” means all matters which are directly under the control or decision-making authority of the management of the company in question. Such matters include all conditions of employment of the company’s own workers, relations with owners and investors, and matters concerning the safety of the products and services delivered to customers.

Definition: primary stakeholder relations include relationships with suppliers, subcontractors, subsidiaries, partners in joint ventures, consultants, and others whom the initiation or continuation of a commercial relationship lies within the control of the management of the company.

PRINCIPLE: The mining industry, as a business community, must also have a wider responsibility in both moral and legal terms to use its influence to promote respect for human rights.

Prepared by Australian Asia-Pacific Mining Network 24 Principles for the Conduct of Company Operations within the Minerals Industry A mining company’s reputation will be increasingly affected by its response - in word and deed - to the violation of human rights and the defence of such rights. Violations of human rights may contribute to civil instability and to uncertainty in the investment climate, but even where this is not the case, mining companies should not be silent witnesses. Mining companies have a responsibility to use their influence to attempt to stop violations of human rights by governments or armed political groups in the countries in which they operate. Large companies regularly try to influence governments’ tax and trade policies, their labour laws and environmental rules. The silence of powerful business interests in the face of human rights violations is not neutral, and is often interpreted by governments and other non-state organisations as implicit support.

Companies may argue that they should not take action in this way because to do so would be to interfere in domestic politics or offend the values of other cultures. However, the international community has decided, through a variety of covenants and agreements, that the promotion and protection of inherent human rights transcends national and cultural boundaries.

“Companies can’t be a substitute for governments. We have no mandate and no authority. But to say there are things which we can’t and shouldn’t do is not to say that we should do nothing. We are part of those societies and can’t be indifferent to their needs and aspirations. We can give a lead.” John Browne, Group Chief Executive, The British Petroleum Company p.l.c. 1997.

PRINCIPLE Within their spheres of influence including the wider communities in which they operate and particularly with respect to secondary stakeholders, business must observe social responsibilities so as to secure the effective recognition and observance of internationally accepted human rights standards.

Definition: By secondary stakeholders we mean those individuals or groups whose interests can be affected by a company’s actions or omissions yet who do not come within the sphere of operations of the company itself. Among the most important of these secondary stakeholders are:  residents of local communities in which businesses may have production facilities or offices,  competitors in the related small business fields,  business and trade associations.

Definition: The term wider community refers to:  state and national governments,  regional and international inter-governmental organisations,  local, regional and international not-for-profit, non-governmental organisations working for human rights, education, welfare, economic or cultural development, environmental protection, and various other humane objectives,  general populations of the countries in which the business operates.

Prepared by Australian Asia-Pacific Mining Network 25 Principles for the Conduct of Company Operations within the Minerals Industry All corporations are urged to specify and document their commitment to meeting their obligations under international law in respect to primary and secondary stakeholders and to the wider community.

5.4 Economic Considerations For Human Rights Promotion and Protection

COMMENT Protecting and promoting human rights is good for effective and profitable mining business.

Protecting and promoting human rights helps business in the following ways:  enhances the social vitality of a community where business operates;  works against repressive regimes to improve political stability;  builds employees’ confidence and respect for the company;  builds a company’s reputation amongst shareholder and business communities.

Action by mining companies to protect and promote human rights supports successful mining business operations in significant ways. This action (in stark contrast to inaction) helps build social collateral and political stability in the location of operations. Also, such action is crucial to the integrity and global reputation of the company. Corporate leadership and long term business success depends, among other things, on these dimensions.

“The business sector thrives where society thrives. We don’t have to look far for an example of this. Look at the investment confidence in Northern Ireland during the first IRA cease-fire and after that cease-fire broke down” Peter Sutherland, Chairman of British Petroleum, former director of GATT/WTO, 1997.

While it is not our place to prescribe effective mining practice on economic grounds, we believe the following to be worthy considerations for the joint goal of effective business and human rights promotion and protection.

CONSIDERATION: Mining companies should consider their legal liability in relation to human rights infringements. Companies around the world have faced and continue to face the spectre of massive compensation payouts associated with human rights violations. There are numerous examples of large corporations facing such payouts as a result of direct violations of human rights and as a result of environmental resource degradation leading to the human rights violations of communities. Companies face the potential of litigation under host country law, international law, and law in their own country for human rights crimes committed in the host country.

CONSIDERATION: Mining companies which uphold their obligations on human rights as previously described will be likely to build a stronger reputation which is important for business is several ways.

Prepared by Australian Asia-Pacific Mining Network 26 Principles for the Conduct of Company Operations within the Minerals Industry Companies which demonstrate moral leadership will gain the confidence of other businesses, governments and corporate partners, build shareholder confidence, contribute to community well-being and political stability in the locations of mining operations, and gain respect, pride and commitment of employees.

CONSIDERATION: Mining companies enhance their reputation amongst shareholders, corporate colleagues, and potential government partners by pursuing a human rights agenda as part of core business.

In business, reputation is everything. A loss of faith by shareholders may be caused on moral or economic risk grounds (or both) when companies contravene human rights law. Companies who seek leadership in the commercial arena can ill afford negative reports on their behaviour. With efficient media technologies, and committed and intrepid journalists keen to expose transgressions, companies conduct immoral or illegal activities at their peril.

CONSIDERATION: Protecting human rights helps to build a stronger and more stable community and society within which company operations must take place.

For companies interested in long term operations, which most mining companies are, they have a vested economic interest in building the human rights framework which underpins an open and vital society which supports their enterprise. Instability, both politically and socially increases the risk that business will suffer or fail due to uprising or conflict. Week social capital means a debilitated work force. In a repressed society, business loses out over the long term. As John Browne, Group Chief executive of BP stated

“ open markets, efficient and sustainable use of resources…, steady economic development and an open society are the conditions in which we can best pursue our business. They run directly contrary, of course, to the common belief that companies find it easier to deal with the apparent stability of repressive regimes than to manage the uncertainties of democracy. In fact, stability built on repression is always false.”

CONSIDERATION: Mining Companies which demonstrate moral leadership by supporting such issues as human rights are more likely to have an enthusiastic and committed work force.

Contrary to some schools of thought in management, workers are not inert to the moral behaviour and leadership of the companies for which they work. People live and work by their values and principles. Working for a company that disregards human rights does little to instil pride and build morale in the workers, at all levels of mining operations.

5.5 How

 The machinery of how these obligations should be structured will include a commitment from mining companies to adhere to human rights obligations and commit to the kinds of programs outlined here.

PRINCIPLE: Mining companies should develop a Company Policy for human rights.

All mining companies should adopt an explicit company policy on human rights which includes public support for the Universal Declaration of Human Rights. Companies should establish procedures to ensure that all operations are examined for their potential impact on human rights, and safeguards to ensure that company staff are never complicit in human rights abuses. The company policy should enable discussion with the authorities at local, provincial and national levels of specific cases of human rights violations and the need for safeguards to protect human rights. It should enable the establishment of programs for the effective human rights education and training of all employees within the company and encourage collective action in business associations to promote respect for international human rights standards. The policy should include provision for independent monitoring and an open and candid reporting system, undertaken in consultation with NGOs with expertise;

The code of conduct can then be detailed and operationalised in a set of operational principles which sets our amongst other things:  the company’s position in relation to these issues: its philosophy and rationale.  the mechanisms by which the company will fulfil those obligations.  the nature and format of a regular, open and candid reporting system.  provision for independent monitoring, undertaken in consultation with NGOs with expertise.

PRINCIPLE: Mining companies should prescribe and enforce a set of operational principles relating to all aspects of mining operations for the protection and promotion of human rights.

Issues for consideration include all conditions of employment of the company’s own workers, relations with owners and investors, matters concerning the safety of the products and services delivered to customers, and environmental harm. In addition, operations include relationships with suppliers, subcontractors, subsidiaries, partners in joint ventures, consultants, and others with whom the initiation or continuation of a commercial relationship lies within the control of the management of the company.

In practice, achieving the above would mean that the company is committed to the a number of practical steps laid out in the following operational principles checklist.

A model human rights code

5.5.1 Philosophy/Rationale a. Overall operations The company will observe not only the laws applicable in the countries in which they operate but also the rules of international human rights law which include requirements which must be met not only by states but by other entities, regardless of whether such

laws have been ratified by the states within which companies operate. See above for specific declarations and covenants.

b. Investment decisions The company recognises that a repressive human rights climate is not conducive to either market economy, worker productivity or product quality. Therefore in making investment decisions the company should indicate clearly that the general human rights situation in a State is taken into account and that it will not either directly or indirectly become involved in human rights violations as a result of its investment.

c. Political activities The company recognises that respect for human rights is of fundamental importance and in the legitimate interests of employees, customers and shareholders. The company reserves the right and considers it its responsibility to speak out openly about flagrant and systematic violations of human rights, to lobby governments to pass legislation to implement human rights norms mentioned above and to act to oppose specific violations of internationally recognised human rights by governments and/or military.

d. Community relations The company takes an interest in community matters which may not be directly related to the business and will seek opportunities for involvement in community development and education programs to promote sustainable community development, human rights education and awareness.

5.5.2 The effect on company behaviour In practice achieving the above would mean that the company is committed to the following practical steps:  ensuring that the company’s working practices set an example to others by respecting the fundamental human rights of employees and those with whom the company does business;  banning the purchase of goods made with child labour, forced labour or prison labour  publicly condemning all human rights violations in the area of operations  urging full and impartial investigations of such violations in discussions with local and national authorities;  looking into the human rights records of other parties when negotiating joint venture and contracts  showing zero tolerance for local human rights violations by the military;  reviewing all policies and practices of operation to ensure that the company’s relations and contact with the military and government do not - however unwittingly - play a part in contributing to human rights violations;  reviewing all policies and practices relating to private security employees;  maintaining regular dialogue with human rights organisations locally and internationally so that views can be shared and concerns freely discussed;

 raising awareness of human rights issues within government, military and the community  training managers and staff in human rights standards;  asking other companies to follow suit.

5.5.3 Monitoring its observance The company shall appoint a director for human rights. This director will have a direct line of mutual communication with local management and the Board of Directors. The director shall have staff support in the form of human rights experts.

This director will implement all internal human rights reviews and training programs. This will include a review for all managers and staff to focus on any shortcomings and how improvements could be made. The outcomes will be made public through the annual report.

5.5.4 Promoting compliance The company recognises that if the code of human rights conduct is to be complied with then a regular and independent external review of the policy as practiced will be implemented. This process shall also include periodic meetings with interested parties both inside and outside the company. The final conclusions will be made public.

The process of implementation monitoring must be an open and candid process which is done in consultation with NGOs and which has measurable outcomes and redress procedures for non-compliance with the C ode adopted by the company.

EXAMPLE Mining companies are encouraged to adhere to the “Caux Round Table Principles for Business”, a set of principles negotiated and adhered to by business leaders from the United States, Japan and Europe. In essence, these principles are formed from a blend of the Japanese concept of “kyosei” (living and working together for the common good) and the Western concept of “human dignity”, referring to the sacredness or value of each person. The Principles cover a number of human rights and trade standards. One section in particular is worth quoting:

Communities We believe that as global corporate citizens, we can (companies can) contribute to such forces of reform and human rights as are at work in the communities in which we operate. We therefore have a responsibility in those communities to:  respect human rights and democratic institutions, and promote them wherever practicable;  recognise government’s legitimate obligation to the society at large and support the public policies and practices that promote human development through harmonious relations between business and other segments of society;  collaborate with those forces in the community dedicated to raising standards of health, education, workplace safety, and economic well-being;  promote and stimulate sustainable development and play a leading role in preserving and enhancing the physical environment and conserving the earth’s resources;  support peace, security, diversity, and social integration;  respect the integrity of local cultures; and  be a good corporate citizen through charitable donations, educational and cultural contributions, and employee participation in community and civil affairs”

5.6 International Humanitarian Law - with respect to Armed Conflict International Humanitarian Law (IHL) is that body of law which regulates the conduct of armed conflict toward the minimisation of harm to civilians and those placed outside the combat for whatever reason. It is the obligation of mining companies to avoid conduct that is likely to exacerbate a situation in a way that might lead to armed conflict.

PRINCIPLES Companies must not hire mercenaries to protect their business interests as such conduct is likely to inflame local tensions and is an endorsement of conduct condemned by international community.

Companies should not operate in areas where such operations require the use of military forces or excessive security in order to maintain the operation.

Companies should suspend operations where existing operations require such military force to operate until agreement on the operations could be reached with local communities and/or their representatives

Companies should publicly speak out against militarisation of areas in which they operate..

In Australia the Crimes (Foreign Incursions and Recruitment) Act 1978 regulates issues dealing with mercenary activities with an Australian connection. Furthermore, Australia has recently indicated that it will ratify the International Convention against the Recruitment, Use, Financing and Training of Mercenaries and lobby regional governments to do so as well. The attitude of the Australian Government and other regional governments make the employment of mercenaries by mining companies legally dangerous, quite apart from being morally unacceptable.

Mining companies are encouraged to be mindful of important IHL treaties, such as the Geneva Conventions of 1949 and the Additional Protocols to those Conventions of 1977. Furthermore, all the human rights treaties referred to above are applicable in an armed conflict situation.

Armed conflict is devastating for a country, it’s people, culture and economy. It is devastating also for a company attempting to run a financial operation. Mining Companies by doing all that is reasonably within their power to avoid exacerbating the social, political and cultural climate which might lead to conflict will be as much the beneficiaries of peace as the communities in which they operate.

PRINCIPLE: All mining companies should ensure that any security arrangements protect human rights and are consistent with international standards for law enforcement.

Any security personnel employed or contracted should be adequately trained. Procedures should be reviewed for their consistency with the United Nations (UN) Basic Principles on the Use of Force and Firearms by Law Enforcement Officials and the UN Code of Conduct for Law Enforcement Officials. They should include measures to prevent excessive force, as well as torture or cruel, inhuman or degrading treatment. Companies should develop clear rules for calling in or contracting with Prepared by Australian Asia-Pacific Mining Network 31 Principles for the Conduct of Company Operations within the Minerals Industry state security forces and for not hiring security personnel who have been responsible for serious human rights violations. Any complaint about security procedures or personnel should be promptly and independently investigated. Review all policies and practices in areas of conflict to ensure that the company’s relations and contacts both formal and informal with the military do not play a part (however unwittingly) in contributing to human rights violations.

PRINCIPLE Mining Companies should have appropriate relationships with the military and law enforcement agencies.

They should publicly urge a full and impartial investigation into all reported human rights violations in and around the area of operations and urge that perpetrators be brought to justice. They should condemn human rights violations by the military in and around areas of operations.

PRINCIPLES: All mining companies should take steps to ensure that suppliers, partners or contractors do not infringe human rights principles. This relates particularly to issues such as labour and discrimination standards and the hiring of security contractors.

All mining companies should establish mechanisms to effectively monitor all their operations’ compliance with codes of conduct and international human rights standards.

Such mechanisms must be credible and all reports must periodically be independently verifiable in a similar way to the auditing of accounts or the quality of products and services. Other stakeholders such as members of local communities in which the company operates and voluntary organisations should have an opportunity to contribute in order to ensure transparency and credibility. If serious human rights violations continue to occur, the company should re-examine its presence in that country and whether its investment is appropriate and justifiable.

Prepared by Australian Asia-Pacific Mining Network 32 Principles for the Conduct of Company Operations within the Minerals Industry 6. LABOUR STANDARDS AND WORKERS RIGHTS

6.1 Introduction

Government are driven by a range of factors such as IMF structural adjustment policies, the Uruguay round of GATT, the desire to attract direct foreign investment or the need for export income, in order to encourage mining companies to invest. Many governments use the low cost of labour and unfettered labour laws as the basis of their industrial expansion. Such a political environment can enable companies to operate without serious consideration of best international practice with respect to the environment, human rights and labour conditions. The only way to overcome such concerns is to make a clear commitment to international standards.

In order to attract foreign investment the position of labour in many countries is very precarious because of:  The desire of governments to keep labour cost as low as possible  The fear of governments of anything that would encourage democratisation and people’s participation in development on issues affecting the poverty and disadvantaged.  Desire of governments to present a compliant workforce and therefore every effort is taken to suppress free trade unions, strikes and demonstrations.  The use of the military to threaten, intimidate and control is a way to bring about a compliant workforce.  The failure of government to enact legislation for the protection of the health, safety and conditions for workers. Or where there is such legislation then a failure to enforce it.  The pressure of newly emerging countries to build an industrial base in order to achieve fast economic transformation.  The poverty of the masses of the people means that people (including children) are willing to work irrespective of the conditions.  The failure of governments to raise and maintain minimum wage levels in relationship to poverty.

All labour laws need to take into account the basic instruments of the United Nations conventions, which include:

CROC The Convention on the Rights of the Child ICCPR International Covenant on Civil and Political rights ICESCR International Covenant on Social, Economic and Cultural Rights UDHR Universal Declaration on Human Rights; as well as CEAFDAW The Convention on the Elimination of all Forms of Discrimination Against Women

and the core International Labour Organisation (ILO) conventions, which are more strongly worded and pro-active of worker rights include:  Conventions 29 and 105 on the abolition of forced labour;  Conventions 87 and 98 on the rights to freedom of association and to bargain collectively;  Conventions 111 and 100 on the prevention of discrimination in employment and equal pay for work of equal value; and Prepared by Australian Asia-Pacific Mining Network 33 Principles for the Conduct of Company Operations within the Minerals Industry

 Convention 138 on the minimum age of employment (child labour).

6.2 The Must - Obligations of Companies

PRINCIPLE: Companies must observe not only the labour laws applicable in the countries in which they operate but also International Human Rights law and the International Labour Organisation conventions, regardless of whether such laws have been ratified by the states within which companies operate.

PRINCIPLE: Companies must recognise that basic workers' rights is of fundamental importance and in the legitimate interests of employees and contractors adhere to the following conventions:

6.3 The Right and Freedom to Work Principle

PRINCIPLE: Companies must recognise that everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. (UDHR 23.1)

6.4 Equal pay for equal work

PRINCIPLE: Companies must recognise that “everyone without discrimination has the right to equal pay for equal work” (UDHR 23.2)

6.5 Just reward

PRINCIPLE: Companies must recognise that “everyone who works has a right to just and favourable remuneration ensuring for him/herself and his/her family an existence worthy of human dignity supplemented, if necessary, by other means of social protection” (UDHR 23.3)

6.6 Right to holidays and leisure

PRINCIPLE: Companies must recognise that “everyone has the right to rest and leisure, including reasonable limitations of working hours and periodic holidays” (UDHR 24).

6.7 Standard of living/income

PRINCIPLE: Companies must recognise that “everyone has the right to a standard of living adequate for health and well-being of him/herself and his/her family, including food, clothing, housing and medical care and necessary social services, and the right to security .in the event of unemployment, sickness, disability, widowhood, old age or lack of livelihood in circumstances beyond his/her control” (UDHR 25.1)

6.8 No slave or forced labour

PRINCIPLE: Companies must recognise that forced labour is unacceptable, and therefore, “no one shall be required to perform forced or compulsory labour” and “no one shall be held in slavery; slavery and the slave trade in all their forms shall be prohibited”. ICCPR 8.1, 8.3)(ILO No.105)

6.9 Non Discrimination

PRINCIPLE: Companies must recognise that all people have the right to work “without discrimination of any kind as to race, colour, sex, language, religion, political or other opinion, nationality or social origin, property, birth or other status” (ICESCR 2.2)

6.10 Vocational training

PRINCIPLE: Companies must recognise that all people have the right to “technical and vocational guidance and training programs, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms” (ICESCR 7.2)

6.11 Conditions of employment

PRINCIPLE: Companies must recognise the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular:  fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work nor inferior to those by men, with equal pay for equal work;  a decent living for themselves and their families in accordance with the provisions of the present Covenant;  equal opportunity for everyone to be promoted in his/her employment to an appropriate higher level. Subject to no considerations other those of seniority and competence;  rest, leisure and reasonable limitations of working hours and periodic holidays with pay, as well as remuneration for public holidays (ICESCR 7)

6.12 Trade Union Rights

PRINCIPLE: Companies must recognise the right of everyone to form trade unions and join the trade union of his/her choice, subject only to the rules of the organisation concerned, for the promotion and protection of his/her economic and social interests. No restrictions may be placed on the exercise of this right other than those prescribed by law, which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others;

PRINCIPLE: Companies must recognise the right of trade unions to establish national federations or confederations and the right of the latter to form or join international trade-union organisations.

PRINCIPLE: Companies must recognise the right of trade unions to freely operate subject to no limitations other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others;

PRINCIPLE: Companies must recognise the right to strike provided that it is exercised in conformity with the laws of the particular country. (ICESCR 8.1)

PRINCIPLE: Companies should promote collective bargaining as the most fair way for the employer-employee relationship (ILO Convention 87 and 98 and the OECD guidelines).

6.13 The Elimination of discrimination against women

The following principles are designed to ensure the elimination of discrimination against women in the field of employment in order to ensure on the basis of equality of men and women, the same rights, in particular:

PRINCIPLE: Companies must not discriminate against women and therefore must recognise:  the right to work as an inalienable right of all human beings;  all people have the right to the same employment opportunities, including the application of the same criteria for selection in matters of employment;  the right to free choice of profession and employment, the right to promotion, job security and all benefits and conditions of service and the right to receive vocational training and retraining, including apprenticeships, advance vocational training and recurrent training;  the right to equal remuneration including benefits, and to equal treatment in respect of work of equal value, as well as equality of treatment in the evaluation of the quality of work;  the right to social security, particularly in cases of retirement, unemployment, sickness, invalidity and old age and other incapacity to work, as well as the right to paid leave;  the right to protection of health and safety in working conditions, including the safeguarding of the function of reproduction. Principles taken from (CEAFDAW 12.1)

6.14 Discrimination on the basis of marriage or maternity

PRINCIPLE: Companies must recognise the special needs of women and thus:  insure against “dismissal on the grounds of pregnancy or of maternity leave and discrimination in dismissal on the basis of marital status”;

Prepared by Australian Asia-Pacific Mining Network 36 Principles for the Conduct of Company Operations within the Minerals Industry  introduce “maternity leave with pay or with comparable social benefits without loss of former employment, seniority or social allowances”;  support clauses which “encourage provision of the necessary supporting social services to enable parents to combine family obligations with work responsibilities ...on particular through promoting the establishment and development of a network of child-care facilities”;  recognise the need “to provide special protection to women during pregnancy in types of work proved to be harmful to them.” (CEAFDAW 12.2)

6.15 Children and Work

PRINCIPLE: Companies must recognise “the right of the child to be protected from economic exploitation from performing any work that is likely to be hazardous or to interfere with the child’s education, or be harmful to the child’s health or physical, mental, spiritual, moral or social development.” (CORC 32.1)

PRINCIPLE: Companies must “respect the minimum age for admission to employment”. (CORC 32.2a)

Definition: A child means every human being below the age of eighteen years unless under the law applicable to the child, majority is attained earlier. (CORC 1)

7. INDEPENDENT MONITORING, AUDITING AND REPORTING

7.1 Codes of conduct including enforcement

PRINCIPLE: Companies should adhere to codes of conduct that are acceptable to NGOs and landowners groups/communities in the host countries (where projects are occurring). Codes should include:  the company’s position in relation to issues: its philosophy and rationale.  the mechanisms by which the company will fulfil its obligations.  the nature and format of a regular, open and candid reporting system.  provision for independent monitoring, undertaken in consultation with NGOs with expertise.

7.2 Independent Monitoring

PRINCIPLE: Companies should allow an on going process of independent transparent monitoring of their operations, including the impact of company operations on environmental, labour, human, civil, political and social rights.

PRINCIPLE: The company shall appoint a director for human rights. This director will have a direct line of mutual communication with local management and the Board of Directors. The director shall have staff support in the form of human rights experts.

This director will implement all internal human rights reviews and training programs. This will include a review for all managers and staff to focus on any shortcomings and how improvements could be made. The outcomes will be made public through the annual report.

7.3 Promoting compliance

PRINCIPLE The company must recognise that if the code of human rights conduct is to be complied with then a regular and independent external review of the policy as practised must be implemented.

This process shall also include periodic meetings with interested parties both inside and outside the company. The final conclusions must be made public.

The process of implementation monitoring must be an open and candid process which is done in consultation with NGOs and which has measurable outcomes and redress procedures for non-compliance with the Code adopted by the company.

Independent monitors should involve a variety of different stakeholders who should be nominated and selected by the stakeholders themselves.

7.4 Independent auditing

PRINCIPLE: Companies should have regular and independent audits of their operations carried out by independent auditors, which include representatives nominated by relevant stakeholders.

7.5 Design and implementation of monitoring and auditing

PRINCIPLE: Companies must recognise that design and implementation of the independent monitoring and auditing should be jointly designed by the company in consultation with representatives of communities and NGOs.

Programs for auditing and monitoring should include verifiable and monitorable targets agreed by company and independent representatives.

7.6 Independent verification and reporting

PRINCIPLE: Companies must report the results of auditing and monitoring programs in an annual report prepared and verified by an independent auditor agreed to by stakeholder representatives.

The report should detail areas in which a company has failed to meet agreed targets, has been involved in accidents or incidents of any the areas audited or monitored or has infringed regulations or laws governing its operations. Where there are disagreements between independent parties and the company these should be reported.

Such community participation should start at the earliest stages of a project (ie during the planning of any operation affecting the community) and should continue until either a decision is made not to develop a project or until a project shuts down. It should involve communities or community nominated representatives in design, management, operation, monitoring, auditing and reporting on company operations and should be facilitated via a trust fund.

7.7 Complaints mechanism

PRINCIPLE: Companies should support the establishment of an independent and accessible complaint mechanism, to which communities who feel that the industry's standards have been breached by a particular mine can bring complaints. The Minerals Council of Australia together with the Australian Government could initiate this.

This complaints body would be similar in operation to the World Bank's Independent Inspection Panel, which was established by the Bank in 1993 in response to increasing opposition and complaints from local communities to a number of its large development infrastructure projects.

The basis of complaints must be that, in the implementation of a World Bank funded project, the Bank did not adhere to its own standards or policies as set down in its

Prepared by Australian Asia-Pacific Mining Network 39 Principles for the Conduct of Company Operations within the Minerals Industry policy or procedures documents. A similar principle could be applied to standards set by the mining industry in Australia.

While funded by the industry and the Australian Government, it would retain as much independence as possible and be staffed by people from outside the industry with perhaps a legal or community development background.

To be effective it would need some power to obtain information from companies about their operations, which could be legislated power. And it would probably need to conduct its own on the spot investigations at overseas mine sites. 8. BIBLIOGRAPHY

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Human Rights New Consensus : UN human Rights Conference 1993; Regency press; London; 1995 Prepared by Australian Asia-Pacific Mining Network 40 Principles for the Conduct of Company Operations within the Minerals Industry

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Note: The U.N. Charter and other international human rights instruments and the relevant ILO conventions are available from the University of Minnesota Human Rights Library on the Internet at : http://www.umn.edu/humanrts/instree/ainstls2.htm.

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